EPA proposal could block new coal plants

Limits on new plants' emissions called unfeasible

The Obama administration proposed rules Friday to sharply limit carbon dioxide emissions from new power plants, a move that fulfills the president's promise to fight climate change but could block any coal-fired unit from being built.

The rules, the first such federal limits on greenhouse gases, effectively require future coal plants to capture and store some of their emissions of carbon dioxide. But industry, which is already preparing to challenge the rules in court, said the emerging technology is extraordinarily expensive, making the regulatory bar too high to meet.

Gina McCarthy, the Environmental Protection Agency's administrator, dismissed the industry claims, saying that carbon capture and storage is "feasible and available. We know that because it's been demonstrated."

"This proposal rather than killing coal paves a path forward for coal to be part of the future energy mix," she told the National Press Club in Washington.

"Yet again, EPA is offering a costly, heavy-handed proposal that risks jobs and economic growth, all for negligible changes to our carbon dioxide emissions and no discernible impact on the global temperature," said U.S. Rep. Lamar Smith, R-San Antonio.

Cheap natural gas

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Even so, developers already have abandoned plans for several new coal plants in Texas because abundant and cheap natural gas has made the projects no longer viable. What's more, the state leads the nation in producing natural gas, so it generally benefits when demand for the cleaner-burning fuel rises.

The proposal comes three months after the president renewed his push to combat global warming. Power plants are the nation's largest source of carbon dioxide and other gases linked to global warming.

As a next step, the EPA intends by next June to bring forward emissions limits for existing power plants, rules that could have a more profound impact on Texas than the ones proposed for future units. The state, which has 18 coal plants, pumps more carbon dioxide into the air than any other.

"It will be an important rule for Texas," said Al Armendariz, a former EPA official who leads the Sierra Club's anti-coal campaign in the state. "It will give clarity to energy companies about what their business models should be."

West Texas project

The rules proposed Friday would require future coal-fired plants to release no more than 1,100 pounds of carbon dioxide per megawatt-hour, down from the average of 1,800 pounds per megawatt-hour for conventional units.

Large natural gas-fired plants, meanwhile, would have to limit emissions to 1,000 pounds per megawatt-hour - a much easier standard to meet considering most units already restrict releases to about 800 pounds per megawatt-hour.

While the proposed rules favor gas, the EPA pointed to four projects, including one in West Texas, as evidence that new coal-fired generation is not dead.

The Texas Clean Energy Project, which is expected to break ground near Odessa this year, would gasify coal for electricity and capture as much as 90 percent of its carbon emissions. Some of the gases will be injected into nearby oil fields to extract oil.

Federal subsidy

The Summit Power Group's 400-megawatt project is expected to cost $2.5 billion, with $450 million coming from the federal government.

"What people don't realize is that all the technologies used in the project are in operation elsewhere in America and other countries," said Laura Miller, Summit's projects director in Texas. "It's just that no one has put them all together in one project."

Scott Segal, director of the Electric Reliability Coordinating Council, which represents power companies, said carbon capture and storage should not be the basis for the new limits because the technology is unproven in the marketplace.

"The Clean Air Act requires that technologies be demonstrated and take into account costs," he said. "Basing standards on highly subsidized, noncommercial scale and even nonbuilt facilities is contrary to the spirit and plain language of the statute."

But James Marston, the Environmental Defense Fund's vice president for U.S. climate and energy, said the industry is being hypocritical about the prospects for carbon capture.

"When industry wants subsidies, it's great," he said. "But now when people take them at their word, it can't be done."